Niue budget under scrutiny as deficit grows and community spending left out

MPs in Niue are pressing the newly re-elected government over its first Budget since the election, raising concerns about shifting priorities, rising spending, and a widening deficit they say needs closer scrutiny.

At the centre of the debate is why community development and social welfare - long-standing areas of government spending - are no longer listed among the government’s stated Budget priorities despite remaining major parts of the public expenditure.

The questions came as the Niue Assembly completed the first reading of the 2026/27 Appropriation Annual Bill on 10 June.

The Budget sets out $83.4 million in spending against $65.8 million in expected revenue with the bill now before the Public Accounts Committee for detailed scrutiny.

MP Robert BJ Rex, who topped the Common Roll vote in May's election, welcomed investment in tourism and continued subsidies but raised several concerns about where the money is going.

He pointed to a drop in education funding, called for stronger support for farmers and questioned why community development and social welfare had been left out of the government's stated priorities.

MPs and the Speaker of the Niue Fono Ekepule. Photo/Facebook

According to last year's budget documents, community development alone accounted for the largest recurrent spending line item at $5.54m.

Rex also turned his attention to the Niue International Trust Fund, valued at $72.7m as of June 2024 and chaired by Prime Minister Dalton Tagelagi.

With water services failing and infrastructure in need of repair, Rex argued the fund should be put to work for Niueans.

Watch Robert BJ Rex on TV Niue after being elected to parliament.

"Our people should not be complaining about our water services failing,” he said. “The money is there. It will continue to grow. But I believe it is there to help our people as well.

"Our budget needs to focus on the development of our people."

He also raised concerns about a secondary employment tax and questioned why wages and pensions were being cut for people who left the island due to illness.

The budget shows a significant increase in spending, up $15.2m from last year’s $68.2m plan while the deficit has widened from $12.5m to $17.6m.

Tagelagi, who also holds the Finance portfolio, rejected suggestions the deficit signals financial weakness, saying it reflects the cost of delivering services and planned investment.

"This gap should not be interpreted as public debt or structural fiscal weakness,” the prime minister said in a statement.

Niue government Cabinet Ministers (L-R) PM Dalton Tagelagi, Richie Mautama, Rhonda Tiakia and Kahealani Hekau. Photo/Office of the Secretary of Government NIUE/Facebook

“Rather, it reflects the full and transparent cost of delivering government services, alongside planned investments in infrastructure, development priorities, and national resilience."

The government says Niue remains debt-free and is not taking on new borrowing.

Key spending areas include tourism, climate resilience, renewable energy, health, education, public utilities, and infrastructure, with $2.78m set aside for capital projects.

Tagelagi secured a third term as Prime Minister following a closely contested May election where he held his Alofi South seat by just one vote before winning the Assembly's confidence vote 11-9.

Watch Niue's parliamentary sitting for the budget debate below.

Justice and Agriculture Minister Rhonda Tiakia, one of two women in the four-member Cabinet, said agriculture spending was aimed at long-term resilience.

"For Niue, strengthening agriculture is about empowering our families, improving our nutrition and ensuring that future generations continue to benefit from productive and sustainable land use," she told Parliament.

The Public Accounts Committee will now review the Budget before it returns to the Assembly for its second reading.